Appeal Upheld: No Penalty if Tax Paid Pre-Notice. Interest Decision Set Aside.

The appeal was filed against an Order-in-Appeal confirming duty but not interest and penalty. The Bench upheld that penalty is not leviable if service tax is paid before the show cause notice. The Commissioner's decision to set aside interest was not justified, but setting aside the penalty was confirmed. The appeal was partially allowed.

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Issues:
Appeal against Order-in-Appeal confirming duty but not interest and penalty - Service tax paid before show cause notice - Imposition of penalty - Waiver of interest - Applicability of Tribunal rulings.

Analysis:
The appeal was filed against the Order-in-Appeal confirming the duty paid before the show cause notice but not confirming interest and penalty. The Respondents did not appear, so the Revenue was directed to serve notice through the Commissioner. The learned DR argued that interest and penalty should be imposed, citing a High Court judgment and Tribunal cases. The Bench, considering various judgments, upheld that penalty is not leviable if service tax is paid before the show cause notice. In this case, the appellants paid service tax before the notice but not the interest. The Original authority confirmed interest and penalty, but the Commissioner (Appeals) set aside both based on Tribunal rulings. The Bench disagreed with the waiver of interest but confirmed the setting aside of the penalty, partially allowing the appeal.

The learned DR relied on a High Court judgment and Tribunal cases to argue for the imposition of penalty and interest. The Bench, after considering these arguments and various judgments, held that penalty is not applicable if service tax is paid before the show cause notice. The Commissioner (Appeals) had set aside interest and penalty, following Tribunal rulings. The Bench disagreed with waiving interest but agreed with setting aside the penalty, partially allowing the appeal.

In conclusion, the Bench upheld that penalty is not leviable if service tax is paid before the show cause notice. While the Commissioner's decision to set aside interest was not justified, the decision to set aside the penalty was confirmed. The appeal was partially allowed, and the operative portion of the order was pronounced in court upon completion of the hearing.

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